Section 27 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 27 gives a mediated settlement agreement real force. One signed by the parties and authenticated by the mediator is final and binding on the parties and those claiming under them, and is enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a judgment or decree of a court, subject to the challenge route in section 28.
A mediated settlement agreement that is signed by the parties and authenticated by the mediator is "final and binding" on the parties and persons claiming under them. Subject to section 28, it is enforced under the Code of Civil Procedure, 1908 as if it were a judgment or decree passed by a court, and any party or person claiming through them may rely on it by way of defence, set off or otherwise in any legal proceeding. The Act comes into force by notification, and the date is not in the text consulted.
Section 27(1): final and binding
Section 27(1) says "A mediated settlement agreement resulting from a mediation signed by the parties and authenticated by the mediator shall be final and binding on the parties and persons claiming under them respectively and enforceable as per the provisions of sub-section (2)."
Conditions and effects:
| Item | Content |
|---|---|
| Condition 1 | The agreement results from a mediation |
| Condition 2 | Signed by the parties (section 19(2)) |
| Condition 3 | Authenticated by the mediator (section 19(1) and (3)) |
| Effect | Final and binding on the parties and persons claiming under them respectively |
| Route | Enforceable as per sub-section (2) |
"Persons claiming under them" brings in successors and assigns. This is consistent with section 3(s), where "party" includes successors. Notice that the section turns on signing and authentication. Registration under section 20 is optional, and the Explanation to section 20(1) says registration does not affect the right to enforce under section 27; see our article on registration. The text does not make enforcement depend on registration.
If a counterparty has signed a settlement and is not performing it, our legal dispute resolution team can help you plan enforcement.
Section 27(2): enforced like a judgment or decree
Section 27(2) says "Subject to the provisions of section 28, the mediated settlement agreement shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a judgment or decree passed by a court, and may, accordingly, be relied on by any of the parties or persons claiming through them, by way of defence, set off or otherwise in any legal proceeding."
Three consequences:
- Enforcement under the CPC. The route is the Code's, in the same manner as a judgment or decree passed by a court. Our guide on execution petitions and decree enforcement under the CPC explains how decrees are ordinarily enforced. The Act does not say which court, what application, or what fee; those are not in the text consulted and this article gives none. Section 3(d) defines "court", and section 13 deems a mediation held elsewhere or online to be within the jurisdiction of the competent court for enforcement; see our article on sections 13 and 14.
- A shield as well as a sword. The agreement can be relied on "by way of defence, set off or otherwise in any legal proceeding". If the other party sues on the same claim, you can plead the settlement as a defence. If it sues on a different claim, you can set off what you are owed under the settlement.
- Subject to section 28. Enforcement is "subject to the provisions of section 28", which allows a challenge on limited grounds within a limited time; see our article on section 28.
The phrase "as if it were a judgment or decree" is a deeming provision: the settlement is treated like a decree for enforcement, though the mediator did not decide anything. The Act does not say it is a decree for all purposes, and the text consulted should be read as it stands.
Where section 27 does not apply
Two situations are expressly outside this route:
- Compoundable offences referred by a court. The second proviso to section 6(1) says the outcome of such mediation "shall not be deemed to be a judgment or decree of court referred to in sub-section (2) of section 27". See our article on section 6.
- Community mediation. Section 44(4) says a settlement agreement arrived at under Chapter X "shall not be enforceable as a judgment or decree of a civil court"; the section is covered in our article on community mediation procedure.
Section 12A of the Commercial Courts Act, as substituted by the Ninth Schedule, says a mediated settlement agreement arrived at under that section "shall be dealt with in accordance with the provisions of sections 27 and 28" of this Act; see our article on that section. The Act's commencement is by notification, and the date is not in the text consulted.
Practical steps for enforcement
- Check that the agreement is signed by every party and authenticated by the mediator.
- Keep the copy you received under section 19(3) and note the date; it matters for the ninety days in section 28(3).
- Send a written demand for performance, which also records default. Our guide to legal notice format and drafting shows what such a notice should contain.
- File the enforcement application in the competent court in accordance with the Code.
- Expect the other side to consider a challenge under section 28 if any ground exists.
An example
Chopra Components and Bhatt Motors settle a payment dispute through mediation. The mediator authenticates the signed agreement. Bhatt Motors pays half and then stops. Chopra Components can apply for enforcement under the Code as if the agreement were a decree, and when Bhatt Motors later sues for a separate rebate, Chopra Components can set off the unpaid amount under the settlement. The names are invented for illustration.
Need help enforcing a mediated settlement?
A settlement that has been signed but not honoured can be enforced, but the steps and the forum need care. We can help you prepare the demand and the enforcement papers through our legal dispute resolution service.
Key takeaways
- A mediated settlement agreement signed by the parties and authenticated by the mediator is final and binding (section 27(1)).
- It is enforced under the Code of Civil Procedure, 1908 as if it were a judgment or decree (section 27(2)).
- It can be relied on by way of defence, set off or otherwise in any legal proceeding.
- Enforcement is subject to the challenge route in section 28.
- Registration under section 20 is optional and does not affect enforcement.
Read next
- Section 28 of the Mediation Act, 2023: challenge to mediated settlement agreement
- Section 19 of the Mediation Act, 2023: mediated settlement agreement
- Section 20 of the Mediation Act, 2023: registration of mediated settlement agreement
- Execution petition: decree enforcement procedure under CPC
Disclaimer: Based on the Mediation Act, 2023 as enacted and published in the Gazette of India on 15 September 2023, as consulted on 2 October 2026. The Act comes into force by notification; the commencement of each provision, the rules and the regulations should be checked. This article is general information, not legal advice; check the official text before acting.